Second IPO shelved in 2013 on poor show

Within a span of less than three months, two companies have withdrawn their initial public offerings, together worth over Rs 200 crore, amid sluggish investor sentiments.

Garments manufacturer Scotts Garments withdrew its public offer last week after failing to generate sufficient investor interest even after extending the duration of the issue and lowering the price band.

This was the second IPO to be withdrawn this year, after a failed attempt to raise funds through an IPO by Sai Silks (Kalamandir) Ltd in February.

Sai Silks’ Rs 89 crore issue was withdrawn on February 18, 2013.

“Retail investors are mostly staying sidelines and are not participation in the stock market. Due to the sluggish retail demand, the IPO market is not picking up,” said Alex Mathews, Research Head, Geojit BNP Paribas Financial Services.

The IPO of Scotts Garments received bids for only 27 per cent of the 1.05 crore shares on offer, according to data available on the NSE.

Retail investors had bid for six per cent of the 35.19 lakh shares reserved for them.

Non-institutional investors category was subscribed 39 per cent, while qualified institutional buyers portion received 36 per cent subscription and employees 23 per cent.

The company’s original issue period was from April 25-29.

This was later extended to May 3. The price band at which investors could bid for shares of the company was cut from Rs 130-132 to Rs 118-120.